- WTI fails to stay above $70 in the NA session.
- US Dollar Index consolidates daily gains, looks to close the day above 95.
- ADP employment data from Canada disappoints.
The USD/CAD pair came under a modest pressure in the early NA session and erased a small part of its daily gains as rising crude oil prices helped the commodity-sensitive loonie gather strength. However, the pair reversed its course and advanced to a fresh 3-week high at 1.3280 as the barrel of WTI eased below the $70 mark. At the moment, the pair is trading at 1.3277, up 0.82% on the day.
Saudi Arabia’s OPEC governor today said that they would reduce their output by 100K barrels per day in August and allowed crude oil prices to record decisive gains. However, news of oil workers ending their strike after reaching a deal with the union in Norway re-escalated concerns over excess oil supply and capped the WTI’s upside. As of writing, the barrel of WTI was 0.85% on the day $69.55.
Meanwhile, the data released by the ADP on Thursday showed that the private employment decreased by 10.521K in June following May’s 2.9K growth and put some extra weight on the loonie.
On the other hand, weekly jobless claims in the U.S. fell to its lowest level since 1969 at 207K for the week ending July 9 and the Philly Fed Manufacturing Index improved to 25.7 in July from 19.9 in June to point to a healthy activity in the sector. The US Dollar Index, which refreshed its highest level in 12-months at 95.45, struggled to push higher amid falling T-bond yields but remains on track to close the day above the critical 95 mark. At the moment, the index is up 0.45% on the day at 95.27.
On Friday, investors will be focused on the inflation and retail sales figures from Canada. “All in all, core inflation has a probability of disappointing while headline sales may surprise to the upside. If these two things happen, the reaction may be choppy, yet limited. The figures can offset each other. For a more meaningful outcome for the USD/CAD,” FXStreet Analyst Yohay Elam wrote in a recently published report.
Technical levels to consider
The initial resistance for the pair aligns at 1.3300 (psychological level) ahead of 1.3385 (Jun. 27 high) and 1.3470 (Jun. 12, 2017, low). On the downside, supports could be seen at 1.3165 (daily low/20-DMA), 1.3100 (psychological level/50-DMA) and 1.3060 (Jul. 11 low).
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